United States District Court, N.D. Illinois, Eastern Division
May 4, 2005.
MERDELIN V. JOHNSON, Plaintiff,
ALEXANDRA JUNG and GENERAL BOARD OF PENSION AND HEALTH BENEFITS OF THE UNITED METHODIST CHURCH, Defendants. MERDELIN V. JOHNSON, Plaintiff, v. GENERAL BOARD OF PENSION AND HEALTH BENEFITS OF THE METHODIST CHURCH, JIMMY JACKSON, DEBBIE REID, GERTRUDE LIVERNOUS, and HELEN EXARHAKOS, Defendants.
The opinion of the court was delivered by: BLANCHE MANNING, District Judge
MEMORANDUM AND ORDER
These consolidated employment discrimination cases were
recently transferred to this court from Judge Lefkow's docket.
Three motions are fully briefed and pending: (1) Ms. Johnson's
objections to Judge Denlow's Report and Recommendation ("R&R")
regarding General Board's motion in No. 02 5221 to enforce the
parties' alleged settlement agreement; (2) General Board's motion
in No. 04 C 6158 to dismiss the claims against it; and (3) Jimmy
Jackson, Debbie Reid, Gertrude Livernois, and Helen Exarhakos'
motion in No. 04 C 6158 to dismiss the claims against them. For
the following reasons, the parties' settlement agreement in No.
02 5221 will be enforced. As the settlement agreement also covers
the claims raised by Ms. Johnson in No. 04 C 6158, this means that the defendants' motions
to dismiss filed in that case must also be granted.
The court begins with the observation that Ms. Johnson has
previously been represented by five different appointed attorneys
and is presently proceeding pro se. Thus, the court will thus
construe her filings liberally. The court also notes that it has
independently considered whether appointment of counsel would
affect the result in this case. Because it concludes that it
would not, the court will turn to a summary of the relevant
Judge Denlow recommended that the court grant General Board's
motion to enforce the settlement agreement allegedly reached in
No. 02 5221. For a full recitation of the events leading up to
the alleged settlement, the court incorporates the detailed
summary of the facts from the R&R. In short, Judge Denlow
conducted four settlement conferences. Ms. Johnson was
represented by counsel during all of these conferences.
On June 2, 2003, the parties attempted to settle the case. No
agreement was reached and the case was returned to Judge Lefkow
for further proceedings.
In June of 2004, Judge Lefkow referred the case for a second
settlement conference. The following month, after an extensive
negotiations, the parties were close to reaching a monetary
agreement. With the concurrence of the parties, Judge Denlow made
a settlement recommendation as to the financial terms and gave
the parties until August 2, 2004, to advise the court whether
they would accept the recommendation.
Before the parties left the settlement conference, Judge Denlow
asked the parties to complete his Settlement Checklist/Term Sheet
to ensure that all of the other settlement terms would be agreed upon in the event that the parties accepted the
court's monetary recommendation. The Settlement Checklist/Term
Sheet is a three page worksheet which lists questions that
commonly arise when settlement agreements are finalized. The
topics reviewed included items related to the treatment of any
monetary terms, forms of release, confidentiality, enforcement
mechanisms, disposition of the litigation, documentation of the
agreement, the effective date, and other terms. The Settlement
Checklist/Term Sheet completed on this day indicated that there
would be "[n]o binding agreement until the settlement agreement
is fully documented and signed." The parties did not sign the
Settlement Checklist/Term Sheet because they had agreed on most,
but not all non-monetary terms of the settlement agreement.
Therefore, as of July 21, 2004, there was no agreement on either
the monetary or non-monetary terms.
Judge Denlow gave the parties eleven days to consider his
monetary recommendation. On August 2, 2004, the defendants
accepted the settlement recommendation. The same day, Ms. Johnson
sent a letter to Judge Denlow accepting the settlement proposal
"provided the Defendants agree to make the release mutual by
including appropriate language releasing any and all potential
claims against Ms. Johnson." The release agreement on the
Settlement Checklist/Term Sheet indicated a one way release from
Plaintiff to Defendants. Therefore, as of August 2, 2004, there
was an agreement between the parties regarding Judge Denlow's
monetary recommendation, but there was still no agreement on all
of the non-monetary terms.
On August 6, 2004, defendants sent Ms. Johnson a revised
settlement agreement incorporating the mutual release language
that Ms. Johnson had requested. They gave Ms. Johnson until
August 31, 2004, to accept the agreement. On August 30, 2004, Ms.
Johnson sent defendants a revised version of the release agreement that
contained numerous changes to various provisions in the
On August 30, 2004, Ms. Johnson sent Judge Denlow a letter
delineating the paragraphs of the proposed settlement agreement
that were still in dispute. The following day, Judge Denlow held
a third settlement conference to finalize the language in the
settlement agreement. During the conference, the defendants
agreed to all of Ms. Johnson's changes that were listed in her
August 30th letter and handwrote these changes on the settlement
agreement. The parties then initialed all pages of the revised
settlement with the exception of page one, which contained a
provision regarding the treatment of the settlement proceeds.
This page was left unsigned in order to finalize the tax
treatment of the settlement as Ms. Johnson was unsure whether she
wanted the settlement amount to be issued with taxes withheld or
not. Defendants repeatedly assured Ms. Johnson that they were
amenable to whichever tax treatment Ms. Johnson desired.
During the settlement conference on August 31st, Ms. Johnson
never asked to increase the previously agreed upon settlement
amount. The only open issue related to whether taxes would be
withheld, and the defendants had agreed to leave this matter up
to Ms. Johnson and proceed however she wanted with respect to
this issue. Therefore, as of August 31st, all of the disputed
terms had been worked out, as reflected in the initialed
Later on August 31st, the defendants sent a revised version of
the settlement agreement to Ms. Johnson's counsel for her
signature. The revised agreement incorporated all of the
handwritten changes that were agreed to by the parties earlier
that day. Therefore as of August 31, 2004, a meeting of the minds
was reached on all issues relating to the settlement, since the defendants had agreed to accede to however Ms. Johnson
wanted to proceed with respect to taxes.
On September 10, 2004, Ms. Johnson's counsel advised
defendants' counsel that Ms. Johnson had refused to sign the
revised version of the settlement agreement. Ms. Johnson's
counsel informed defendants' counsel that Ms. Johnson might be
willing to sign the settlement agreement if the monetary terms of
the settlement were more than doubled, and the benefit period was
extended from the previously agreed upon 12 months to 18 months.
On September 15, 2004, Judge Denlow held a fourth settlement
conference. As presaged by the September 10th demand for more
money, Ms. Johnson reiterated her request to more than double the
amount of the original monetary agreement and her desire to
extend the benefit period. Negotiations then ceased.
The defendants filed a motion to enforce the settlement
agreement. Judge Denlow issued a detailed R&R which concluded
that the parties had agreed on all material terms and that Ms.
Johnson had acted in bad faith in seeking to renegotiate the
financial terms of the settlement after agreeing to them. He thus
recommended that the defendants' motion to enforce the settlement
in No. 02 C 5221 be granted. He also stated that, but for Ms.
Johnson's financial situation, he would have sanctioned her for
her bad faith attempt to renege on the settlement.
The court will review the R&R using a de novo standard as it
addresses a dispositive issue. 28 U.S.C. § 636(b)(1);
Fed.R.Civ.P. 72(b); Defalco v. Oak Lawn Public Library, 99 C 02137,
2000 WL 263922 at *2 (N.D. Ill. Mar. 1, 2000) (R&R addressing a
motion to enforce a settlement agreement is reviewed de novo). "A settlement agreement is a contract and as such, the
construction and enforcement of settlement agreements are
governed by principles of local law applicable to contracts
generally." Laserage Tech Corp. v. Laserage Lab Inc.,
972 F.2d 799, 802 (7th Cir. 1992). Under Illinois law, an agreement is
binding if the parties have a meeting of the minds as to all
material terms. Abbott Labs. v. Alpha Therapeutic Corp.,
164 F.3d 385, 387 (7th Cir. 1992). A meeting of the minds occurs
"where there has been assent to the same things in the same sense
on all essential terms and conditions." IMI Norgren, Inc., v.
D&D Tooling Mfg., Inc., 306 F. Supp.2d 796, 802 (N.D. Ill.
2004). Accordingly, settlement agreements can be enforceable even
if they do not explicitly resolve ancillary issues. Porter v.
Chicago Bd. Of Educ., 981 F.Supp. 1129, 1131 n. 4 (N.D. Ill.
Judge Denlow concluded that the parties had a meeting of the
minds on August 31st, when they agreed to each and every term of
the settlement except the tax treatment of Ms. Johnson's payment,
and the defendants agreed to let Ms. Johnson pick whatever tax
treatment she desired. According to Judge Denlow, the meeting of
the minds is reflected in the initialed version of the agreement
with the handwritten notations reflecting the final changes.
Ms. Johnson first asserts that she did not voluntarily agree to
the settlement because she felt "undue influence" and "pressure"
regarding the settlement negotiations. Ms. Johnson, however, was
represented by counsel (attorney Steven Florsheim), and the
alleged pressure occurred prior to the key date of August 31,
2004. Moreover, many parties do not ask the court to conduct a
settlement conference or enthusiastically participate in a
conference once one is scheduled. This does not mean that the
court cannot ask the parties to come to the table and discuss
ways to settle their dispute. Second, Ms. Johnson has submitted an affidavit from Mr.
Florsheim in which he states that he did not believe that there
was a meeting of the minds because the defendants had insisted
that Ms. Ms. Johnson take 21 days to consider whether she wanted
to finalize the agreement. Mr. Florsheim's opinion is at odds
with the facts in this case as Ms. Johnson initialed a settlement
agreement on August 31st. It also is inconsistent with Judge
Denlow's finding that Ms. Johnson in fact accepted the agreement
on August 31st and did not revoke that agreement within the seven
day period allowed by the Older Workers Benefit Protection Act,
29 U.S.C. § 626(g).
Third, Ms. Johnson contends that there was no meeting of the
minds because the withholding issue was still open as of August
31st. The court disagrees, as this term is not material. In any
event, there was an agreement as to this purportedly open issue,
as the defendants agreed to do whatever Ms. Johnson wanted with
respect to the withholding for the settlement proceeds. Ms.
Johnson's remaining arguments do not warrant separate discussion.
In sum, the allegations in Ms. Johnson's filing are not enough
to undermine the settlement agreement. At the August 31st
settlement conference, both parties initialed the pages of the
agreement and the only open issue was how to handle the
withholdings for Ms. Johnson's settlement proceeds. The
defendants agreed to let Ms. Johnson choose how to resolve this
issue and agreed to accept whatever choice she made. Therefore,
as of August 31st, the parties agreed to all material terms and
had reached a binding settlement that could only be set aside if
Ms. Johnson revoked the agreement within the seven day period
allowed by the Older Workers Benefit Protection Act. She did not
do so. She is, therefore, bound by the terms of the agreement. It is true that Ms. Johnson now clearly regrets entering in the
agreement. "Buyer's remorse," however, is not enough to overturn
a contract under Illinois law. See Laserage Technology v.
Laserage Laboratories, 972 F.2d 799, 802 (7th Cir. 1992) (where
the terms of a settlement agreement are clear and unambiguous,
they must be enforced as written). The court thus finds, after a
careful review of the entire record, that the settlement is
valid. Accordingly, Ms. Johnson's objections to Magistrate Judge
Denlow's R&R are overruled. As the settlement agreement also
covers the claims raised by Ms, Johnson in No. 04 C 6158, this
means that the defendants' motions to dismiss filed in that case
must also be granted.
For the above reasons, the parties' settlement agreement in No.
02 5221 will be enforced and the defendants' motions to dismiss
filed in No. 04 C 6158 are granted. The clerk is directed to
enter a Rule 58 judgment in Nos. 02 5221 and 04 C 6158 and to
terminate these cases from the court's docket.
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